Monthly Archives: January 2018

How to Tackle Student Loan Repayments

What they didn’t teach you in school, was how to pay for school. Many know what it’s like to look excitably into your direct deposit account or open that envelope on payday, to only be dissatisfied by the large withdrawal that was taken towards your student loan debt.

Confronting what seems like the impregnable wall of debt can be overwhelming. And many can feel unprepared-even duped at the debt to income ratio their college degree has given them. However, it doesn’t have to be this way forever. By changing your strategy and perspective on your educational investment, you can eliminate your monthly payments at an accelerated rate. Learning to tackle this debt in the right way, will become muscle memory for future financial discipline.

Choose the Right Repayment Plan

Americans owe $1.45 Trillion in student loan debt, spread out among 44 million people. While this may seem counter intuitive, choosing the right plan for your income can make a large difference in how much you pay over time. Eighty-five percent of student loans are either Stafford, Perkins, PLUS,or Direct Consolidated. They have 5 repayment options, with the lowest minimum payment starting at $50 for ten years, to the income based plan that takes a “fair” percentage of your salary (decided by the Federal Government) and forgives any debt left after 25 years.

Although it may be tempting to pick whatever has the lowest monthly payment right now, it isn’t the wisest. How much you pay, and on what terms can seriously impact future investments like a home or even being able to put enough away for retirement. Try to pay 10% of your gross (pre-tax) income towards your debt. By biting the bullet now, you will give yourself freedom in the future.

Scrap for Savings

There are some basic practices you can implement to prevent being delinquent on payments. One of those is consolidating your Federal loans. This won’t initially save you on interest, but it will help to relieve you from the headache of keeping track of many different loans. Having them all in one place with one simple payment will enable you to stay on track. Second, sign up for automatic withdrawals from your checking account. Doing so will cut your interest rate by .25 percent.

Keep Your Eye on the Prize

The average student loan monthly payment is $351 a month-and we recommend you paying even more than that if you can fit it into your budget. So, the most important thing you can do is to not fall off the wagon when it comes to tackling your debt. Stay focused on the goal set before you. The impulse purchases and comforts of the present are alluring, but ridding yourself of a financial burden is more rewarding. The more you take hold of your debt, the sooner you will win.

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

First Steps to Financial Fitness

Starting a Financial Fitness routine may be one of the best things you can do for your health. You may not realize it, but financial stress can take a toll on your physical and emotional well-being. If you are one of those who have or are experiencing financial stress, you are not alone. In fact, the leading stressor of Americans is related to finances. Stress if left unchecked, can lead to changes in your body and mood such as:  heart disease, obesity, headaches and depression. Whether you are unemployed, have a growing stack of debt are simply bad at money management, you can start working your way to a healthy lifestyle starting with these five steps!

“You can always improve your fitness if you keep training.” -Pastor Maldonado

  1. Assess Your Fitness Level

In order to know where you’re headed, you need to have a full understanding of where you are starting. Know what you spend, what you have, and what you owe. The first month, simply track what you spend. You may be surprised at how many unnecessary purchase habits you make daily. Take note of what you are taking in post-taxes, so you have a baseline of what you have to work with every month. Of special importance is investigating all of your debt. Find out your credit score, and all debts that may have even gone to collections. This is the most overwhelming step, but don’t fret-you are on the right path. If you would like assistance with this, feel free to reach out to Peoples Bank & Trust to help you along in the process.

  1. Decide Your Fitness Program

What are you training for? This is where you map out where you would like to go. Create short and long term goals and what time frame you would like to achieve them. We suggest starting out with eliminating your debt, by paying off the lowest one first. What habits and routines do you want to establish? What do you want your budget to look like? You can build activity and goals into your daily routine. One aspect to understand is that this is not a quick-fix process. It will take time, so keep your activities simple and progress slowly into building habits. Building financial strength takes time.

  1. Assemble Equipment

Now that you have an understanding of where you are and where you want to be, you can put it to paper! Investing in a journal or a simple pad of paper is a great way to organize your daily routines and financial flexors. Additionally, there are many free apps! However you prefer to track it, make it practical and enjoyable!

  1. Get Started

Now that you have completed the first few steps, you are ready to begin! You have your well thought out plan, so now it is time to execute. You can be creative with your routine, if you want to find savvy ways to save on basic needed items-do it. Whether that be cooking a meal at home, or learning how to change the oil in the car.  It is your plan to tailor.

  1. Monitor Progress

Lastly, we recommend that you monitor your progress every month, as needs can change frequently. It will also help keep you in check and encourage you from straying far from your goals. You will know them by heart. If you need a Financial Coach to hold you accountable, reach out to a friend or trusted advisor. As your fitness level increases, you may find yourself able to be flexible and switch up your goals, or create new ones.  Training takes time, energy and self-control, but by following these steps you are well on your way to being fit!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

 

The Riches Reset: 30 Day Cash Only Challenge

You may have heard the suggestion, but in a day where even plastic purchases are becoming irrelevant, how can paying with cold hard cash be feasible or helpful? We challenge you to find out by going plastic-free for the next 30 days to shake up your spending habits for the new year.  We will begin by alerting you on some of the disadvantages you may experience, followed by the surprising benefits.

Cash Cons

Safety

Carrying cash can be a safety concern. You may feel more exposed to not only being pick-pocketed, but to losing the cash altogether.  When your debit card is stolen or lost, you have an inconvenience, but not a loss of protection. Check in with a member of our team at Peoples Bank & Trust to learn more about the safety features of our debit cards.

Inconvenience

Unless you write down all your purchases, you will have no way to track spending. You’ll need to ensure you have receipts printed or emailed to you if there is a chance of return.  Cash takes up a lot of room-especially if you have a pocket full of coins. This becomes consistently challenging if you only carry a wallet. You don’t want to be THAT person who spills their change all over the loud linoleum floor. To say nothing of the inconvenience you will cause others in line behind you, as their plastic taps impatiently on the counter. We recommend using all of the coins you can first, so you are not weighed down with change.

Credit Benefits

One of the primary reasons many utilize debit cards is the rewards.  With cash, the only reward you can hope to receive is a punch card for your next visit. Additionally, an obvious downside would be you are unable to purchase items online or make travel plans. This may be an economic imperative that you cannot accomplish with cash.

Cash Pros

It’s Painful

Leaning into the pain of cash-only can be good for you. Research shows that the act of spending cash is emotionally more painful than it is using a debit card. Because of this, you may in fact spend less. With each purchase you make, you see your cash value deplete. Unlike a debit card, the effects are immediate. You don’t need to wait until the end of the month to feel the pain when it is most likely too late.

You Become a Budget Master

Some people have had success with the envelope system in their budget planning. It is a way to limit your spending to a predetermined amount allotted in each envelope. They are separated into different categories such as grocery and gas.  It helps you to be aware of how quickly that $4 latte takes away from your Fun Money. This is more hands on than establishing multiple savings accounts.

Appreciation

Research shows that you also have more of an appreciation for your things when you buy them with cash. It’s an aesthetically pleasing reward as you are presently seeing what your money can get you. You are better able to see your hard work pay off. Moreover, if you find yourself taking better care of your belongings, don’t be surprised.

While it may not be possible to go cash-only forever, your Riches Reset will help to cleanse you of negative habits to start fiscally strong in the new year. Afterwards, come see us at Peoples Bank & Trust to see what products can help you reach your financial goals. Best of luck!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender

Common Cyber-Security Threats While Traveling

Whether you are traveling for work or pleasure, the last thing you want to battle with is having your cyber-security compromised. If knowledge is power, Peoples Bank & Trust has created a list of potential threats to your private information and steps to prevent damage while away from home.

Before You Go

Along with remembering to pack a toothbrush, you should also prepare your devices for travel. You should ensure all updates are completed. This will make your systems harder for hackers to penetrate as they have all of the necessary guards and protections the device has to offer at the time.

You may consider backing up your information on cloud storage. You would hate to have forever lost important documents and photos. Should your information become compromised, having these copies of your private information will be useful. We would also recommend changing all of your passwords prior to leaving and again when you return. It is also extremely important, especially when traveling abroad, to let Peoples Bank & Trust know where you will be traveling and when.

While You’re There

Unfortunately, you are at a higher risk the more you travel and use the internet abroad. However, this shouldn’t stop you should you use the proper precautions from these threats.

While convenient, public wireless networks are not secure. Nevertheless, if you need to connect, be sure is a legitimate network by verifying the account with employees. However, your mobile connection is going to be more secure. You are going to want to turn off auto-connect for wifi and Bluetooth as well. If you are able, purchase a VPN  (Virtual Private Network), so you can have peace of mind while surfing the web. We would recommend staying away from public computers-even the hotel and library. You cannot trust that these are on secure networks, and that Keylogger Malware is not present.

To many people’s dismay, you are being watched in ways like never before. You should get into the habit of guarding yourself at all times. When traveling to fun places, it is tempting to share your location. But waiting to share this information is best, so hackers don’t follow where you are, and maybe even make their way up to your hotel room to take your computer. This is another reason why you might consider eating meals outside the normal hours, as that is when most hotel thefts occur.

You can’t avoid purchase while on the road, but be aware of ATM skimmers, point of sale compromises and hidden cameras. ATM skimmers have been on the news frequently. If you can avoid using this altogether by sticking to credit cards or Apple Pay on the road, it may make the experience easier. Businesses card readers may be compromised or a hidden camera could be tracking your pin input. It’s important to always be aware.

We hope that these tips have informed you to be a cyber-secure traveler. For more information about Peoples Bank & Trust’s anti-fraud services, please stop by!

Peoples Bank & Trust Co.

Member FDIC

Equal Housing Lender